Presentation Description

No description available.

Comments

Posting comment...

Premium member

Presentation Transcript

What is a Channel of Distribution? :

What is a Channel of Distribution? “Process including the physical handling and distribution of goods, the passage of ownership (title) and the buying and selling negotiations between producers and middlemen and between middlemen and customers.”
A channel of distribution comprises a set of institutions which perform all of the activities utilised to move a product and its title from production to consumption
*Bucklin - Theory of Distribution Channel Structure (1966)

What is an International Marketing Channel? :

What is an International Marketing Channel? Middlemen in the process between Manufacturer & Final International Consumer who may or may not
Physically handle & distribute the goods
Assume title to goods
Negotiate buying and selling
Middlemen used when the can perform functions more efficiently than manufacturers can

Channel intermediaries - Agents :

Channel intermediaries - Agents Mainly used in international markets
Commission agent - does not take title of the goods. Secures orders.
Stockist agent - hold ‘consignment’ stock
Control is difficult due to cultural differences
Training, motivation, etc are expensive

Channel intermediaries - Retailer :

Channel intermediaries - Retailer Much stronger personal relationship with the consumer
Hold a variety of products
Offer consumers credit
Promote and merchandise products
Price the final product
Build retailer ‘brand’ in the high street

Six basic channel decisions :

Six basic channel decisions Direct or indirect channels
Single or multiple channels
Length of channel
Types of intermediaries
Number of intermediaries at each level
Which intermediaries? Avoid intrachannel conflict

Selection consideration :

Selection consideration Market segment - must know the specific segment and target customer
Changes during plc - different channels are exploited at various stages of plc
Producer-distributor fit - their policies, strategies and image
Qualification assessment - experience and track record must be established
Distributor training and support

Channel Decisions When Entering New Country :

Channel Decisions When Entering New Country Whether to Use Established Channels or Build Own Channels?
Whether to Use Home-country (located in producing firm’s country) or Host-country (located in foreign country) middlemen?
Which intermediaries?
How many intermediaries?
Exclusive – one or a select few
Selective – more than a few, less than all
Intensive – as many outlets as possible

Examples of Home-Country Middlemen(3) Export Trading Company :

Examples of Home-Country Middlemen(4) Agents/Brokers :

Examples of Home-Country Middlemen(4) Agents/Brokers Home country agents/brokers
Do not take title;
Shorter term relationship;
Specialize in certain products

Home-country or Host-country Middlemen? :

Home-country or Host-country Middlemen? Use Home-country or Host-country middlemen
Select Home-country middlemen if you do not wish to enter or do not have capability to enter foreign market
Select Host-country middlemen if you seek greater control over marketing mix; have a presence in the foreign country

Selecting Marketing Channels :

Selecting Marketing Channels Marketing channel decisions are among the most complex & challenging facing the firm
Each channel creates different level of sales & costs
Firm usually committed to decision for long time

Marketing Channels Differ Around The World in :

Marketing Channels Differ Around The World in Services they perform
Breadth of lines they carry
Costs and trade margins
Length of channel - long vs. short

How Do you Select Channel? :

How Do you Select Channel? Cost – Transporting & storing goods
Capital Requirements
Control
Coverage
Character – Does it fit the character of the company and the market?
Continuity – Can you foster loyalty among members?

Why has the marketing channel emphasized recently? :

Why has the marketing channel emphasized recently? Greater difficulty of gaining a sustainable competitive advantage
Growing power of distributors (retailers)
The need to reduce distribution costs
The new stress on growth
The increasing role of technology